Lost In The Shuffle

New Management Disclaims Security Deposit Debt

April 19, 1991|By Robert A. Boron.

Q-I have lived in my apartment in Chicago for about five years and have never received interest on my security deposit. The building changed management companies in the past year and the new company has stated that I have to get the interest from the former company, because it is not responsible for the interest due from before they took over.

I have considered suing for the interest, but the present management agent has told me it`s a waste of time, because the firm has a good lawyer and I`ll probably lose. What rights do I have?

A-Under Section 5-12-080 of the City of Chicago Residential Landlord and Tenant Ordinance, you have the right to receive 5 percent interest for each year from Jan. 1, 1987, or from the date you paid the deposit to the former management company, whichever is later.

Also, the fact that the current management company has not been responsible for the security deposit since you paid it does not relieve it of responsibility in this matter. Assuming the new management company didn`t take the property over in a foreclosure or similar type of action, both this management company and the former one are responsible for the entire amount of interest due to you.

If there was an involuntary takeover of the property, the new management company is not responsible for getting the security deposity from the old one. However, if the property was sold, or the same owner simply decided to change management agents, the new property manager is obliged to get not only the old security deposits, but also the interest payable on them, from the old management company.

The interest is payable to you in cash or as a rent credit within 30 days after each 12-month period of your lease. Because this is part of your rental contract, you have five years to sue for the interest if you have an oral lease or 10 years if the lease is in writing. You therefore have plenty of time to file suit.

If the landlord fails to pay the interest, you can collect damages equal to twice the security deposit plus interest, along with court costs and reasonable attorneys` fees incurred in pursuing the case.

Because you can get reimbursement for attorneys` fees, you may want to hire legal representation. But if you choose to handle the lawsuit yourself, you should not be intimidated by the fact that the other side has an attorney. While the attorney may be more experienced in appearing in court than you are, he or she cannot rewrite the law. Your rights are clearly spelled out in the ordinance and your claim in this case is fairly strong.

To win this case, you simply have to be well prepared. Be ready to show the judge all the papers related to your claim, including your current and past leases and your security deposit receipts or canceled checks.

You may want to discuss this matter with the management company`s attorney before court. On the strength of your case, he or she might well advise the management company to settle without going to trial. Because there is always the possibility of losing the case in court because of some unknown or overlooked factor, a bad settlement is always better than a good lawsuit.

Terminating a tenancy

Q-I served a tenant with a 30-day termination notice to end his month-to- month tenancy. I served it at the end of last month and it terminates the tenancy on the last day of this month. Now the tenant has failed to pay rent for this month. Am I entitled to the rent, and, if so, what steps can I take to collect it?

A-You are entitled to rent for this month. The fact that the tenancy ends after this month does not excuse the tenant from having to pay rent for this month. After all, the tenant continues to live in the apartment, and the tenancy still is in effect for this month.

If the tenant fails to pay the rent for the last month of his tenancy, you can serve him a five-day notice, as you would in any other nonpayment of rent situation. If the tenant tries to pay you the entire rent within the five days after service of the notice, you are required to accept it. If he fails to pay, you can begin eviction proceedings against him after expiration of the notice.

Since you probably want the tenant out as soon as possible, he is actually helping you have him removed from the apartment. If he failed to move at the end of the tenancy under ordinary circumstances, you would have to wait until the start of the next month to have him evicted.

However, if he fails to pay rent, you do not have to wait that extra time. Rather, you can get a head start on the eviction action, which might well put you weeks ahead of schedule in having him removed.

Note that while you may collect rent for this month, you cannot accept any money for any period of time after the stated expiration of the 30-day notice. By accepting rent for beyond that period, you would waive your rights to have him evicted by re-creating his tenancy.

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Robert A. Boron, a Chicago attorney who specializes in leasing matters, writes about landlord and tenant issues for the Tribune.

Questions to him can be addressed to Rental Q&A, Your Place section, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, but he cannot make personal replies.